project packs a punch
Energy's 200 MW Caney River wind project in southeastern Kansas packed
a punch when it came to delivering economic benefits to the local
Renewable power projects in the U.S. have been much praised for moving
the country further along the path to a sustainable energy future. At a
time when the U.S. economy is still struggling to recover from the deep
downturn of the last several years, renewable energy projects are also
receiving an equal amount of praise for the jobs they are creating and
the contributions they make to the revenue base of local governments.
Elk County, in southeastern Kansas, has seen economic challenges for a
number of years. Like many rural areas in the U.S., the county
struggles to keep its youth from moving to larger urban centers such as
Wichita or Kansas City. Losing residents also makes it more difficult
for the county to maintain its tax base and pay for all the services,
everything from maintaining roads to funding local schools.
So it's no surprise that when
Kansas-based TradeWind Energy came forward with a solid plan for a wind
energy project in Elk County, local government officials viewed it
"They were extremely supportive and worked hand-in-hand with us to make
the project a reality," says Matt Gilhousen, senior vice president of
project development for TradeWind Energy and project manager of the
$350 million, 200 MW Caney River project.
"It was an opportunity for Elk County to greatly improve their
financial position. The Payment In Lieu of Taxes (PILOT) we negotiated
with the county will increase their annual budget by 50 percent, for
the life of the Caney River wind project." Some $3 million a year will
now flow to the local economy through PILOT payments and lease
agreements with landowners in the county.
There were other local spinoffs from the project as well: 200 workers
were employed during the construction phase, and the wind power project
employs 15 full-time skilled workers in an area where job creation has
"There are 3,000 people in Elk County, and everyone can see a benefit
from the wind project when you look at what it contributes," says
Gilhousen. "It's one of the really important factors for us as a
developer—to be able to make a positive difference in a
community. It's not very often that you get to make that big of a
difference as the Caney River project did with Elk County."
The Caney River project was a few years in the works. TradeWind Energy
started doing the groundwork for the project back in 2003. "It was one
of the very first projects that we started development work on. It was
focused on accessing the high voltage network that is in the eastern
part of Kansas."
The wind resource in eastern Kansas is solid and viable for wind power,
though it is not as strong as the wind in the western part.
"But the transmission system is much more robust in the eastern part of
the state," explains Gilhousen. "The focus of the project was to get
access to a good wind resource and excellent transmission capacity. The
transmission capacity was the critical component that led to the Caney
River project being built." Westar's 345 kV line runs right through the
Power generated from the project's 111 Vestas V90-1.8 MW turbines will
be moved several states away (through two Regional Transmission
Organizations) to the Tennessee Valley Authority (TVA) and their power
distribution system in the southeast U.S. Under a Power Purchase
Agreement, all of the power produced at Caney River will be sold to the
TVA. The TVA is the country's largest public power company, serving
customers in nine states.
The wind resource they are working with in eastern Kansas will generate
enough electricity to provide power for the equivalent of 60,000 homes.
"It's not as high as the average wind speeds in eastern
Kansas—we're looking at the lower 40s capacity versus the
middle-to-upper 40s capacity in western Kansas. But relative to the
rest of the country, it's robust and a very good wind resource," says
Despite the project's name, the Caney River itself actually has no
influence on wind in the area—Caney River just describes the
general area where the project is located. The 180-mile-long river
originates in Elk County and eventually flows into northeastern
Oklahoma. In many areas, the river is more of a flatwater stream.
The site is primarily pasture land, with some cultivated land.
TradeWind Energy arranged leases with a relatively small number of
farmers and ranchers for the project's nearly 14,000 acres. Landowners
viewed the project very positively, since it means extra revenue for
them. "That's the case more often than not," says Gilhousen. "Farmers
and ranchers welcome the additional revenue that comes off a wind
project—it helps supplement their ag income."
TradeWind Energy always makes a conscious and organized effort to share
information about what is involved with development of a wind farm. As
a sign of how mainstream wind energy has become, Gilhousen said the
landowners were pretty much up to speed on wind power.
"At this point, the industry is mature enough that most of the ranchers
and farmers generally already know that they have viable wind
resources—like they know they have oil or gas on their
property. People have probably been knocking on their doors, and
they've heard the pitch and educated themselves.
When Kansas-based TradeWind
Energy came forward with a solid plan for the $350 million, 200 MW
Caney River project in Elk County, local government officials viewed it
"They've also probably seen wind farms—they're on most of the
major Interstate highways in the Midwest."
The company emphasizes that wind turbines take up only a very small
fraction of the land that is being leased. "Typically, it's well under
two percent, but it could even be one percent or less that is actually
taken out of production. But we usually start with the two percent
figure, just to get the landowners' minds around a number."
With TradeWind Energy being based in Kansas, and the fact that they had
done another Kansas wind project (the two-phase 100 MW Smoky Hills
project in the central part of the state), the company knew the ropes
in terms of regulatory approvals.
"Having done Smoky Hills I and II really helped pave the way for
getting this project done," said Gilhousen. "Kansas is a fairly
business-friendly state. But there are still a significant number of
federal, state, and local permits and authorizations to be obtained,
and we worked very closely with all of those parties."
One distinct difference, though, was that since they were dealing with
the Tennessee Valley Authority, a federal government-owned utility,
they had to receive National Environmental Policy Act (NEPA) approval.
"So we had to do a full-fledged environmental assessment, and that was
an additional environmental permitting hurdle that we had to get over.
Some of our staff had been through similar processes, but this was a
first for us as a company. So it was a new challenge, but we were
successful, and it was well worth the effort."
As it turns out, there were no environmental issues. "The site we
selected was outside the Heart of the Flint Hills, with what we thought
were very suitable properties for wind turbines—and that
proved to be the case, based on the results of the studies. There
weren't any threatened or endangered species to be concerned with."
Although all the necessary approvals were granted for Caney River, it
will likely be some time before further wind project development is
carried out in this area of the state. Kansas Governor Sam Brownback
has expanded an informal moratorium on further wind project development
in the area, to protect areas recognized as "pristine prairie".
"There's an ongoing debate about any sort of development, and native
grasslands or prairie was the most critical topic that was uncovered
through the NEPA process," says Gilhousen.
"We worked closely with the TVA and the stakeholders, primarily with
the federal and state agencies, and the NGOs, to develop a mitigation
plan to help offset any potential impacts by placing conservation
easements on existing grasslands and doing some tree clipping and
restoration of existing prairie habitat." The company also did research
into grassland management and the impact of wind turbines on grasslands.
"The mitigation package is something that we're really proud of," says
Gilhousen. There have been similar packages developed for other wind
projects in Kansas and Oklahoma, but the package for the Caney River
project was more generous and well thought-out, he added. "We worked
very closely with the different agencies to get the right package
pulled together, and I think we were successful in doing that."
There will also be ongoing work in this area. The Caney Wind River
project is providing $8.5 million of the total $9.4 million in funding
for a plan to protect the tallgrass prairie in Kansas. Specifically,
the funding will be used to help establish conservation easements
needed to protect over 18,000 acres within the Heart of the Flint
Hills, restore 6,000 acres of the Tallgrass Prairie Habitat, and
conduct research on its eco-system and wildlife.
Once all the approvals for Caney River were in place, it was a matter
of project execution, and the logistical challenges that come with that
part of the project.
"We have good partners and expert contractors and project managers that
help us do that," says Gilhousen. "I think describing what they deal
with as logistical challenges hits the nail on the head. Wind farms are
complex projects, but it's very much an assembly line process, with one
foundation and turbine pretty much identical to the next
one—it was a matter of building 111 of them in the case of
the Caney River project."
There were some significant
economic spinoffs from the Caney River project: 200 workers were
employed during the construction phase, and the wind power project
employs 15 full-time skilled workers in an area where job creation has
says there is a basic template that can be pulled off the shelf for
construction of a wind project, but he added that each and every
project comes with its own set of challenges. In the case of Caney
River, one of the challenges was an aggressive construction timeline
for the contractor, Balfour Wind Energy Constructors (BWEC), a joint
venture between Texas-based Balfour Beatty Construction and
Oklahoma-based Wind Energy Constructors.
"But we fared pretty well and BWEC was able to meet the end of the year
deadline," says Gilhousen. "There were a lot of wind days and weather
days, but that's not uncommon for Kansas. We do a detailed analysis of
the historical meteorology for a site and plan for those events. But
you never know what Mother Nature is going to throw at you."
He noted that many of the things that make for a smooth running
construction project actually occur months, or perhaps even years,
prior to a dozer blade hitting the dirt.
"You want to, right out of the gate, try to identify any fatal flaws
with a project. That includes properly prospecting and selecting a site
and identifying any flaws. You want to walk through the environmental
permitting, meteorology, transmission interconnection, access to the
right power market and the engineering. Those are the major ones, and
there could be a showstopper in any of those buckets.
"The sooner you can identify them, the sooner you either come up with a
solution—or cut your losses and move on to the next project."
In terms of the construction of a wind project, it needs to be
well-developed, with pre-planning well in place. "Having a well
developed project site leads to a good base, and an on-schedule,
on-budget wind project."
He said all the project "partners" on Caney River—TradeWind
Energy, BWEC, Enel Green Power North America, the Tennessee Valley
Authority, and wind turbine supplier Vestas—worked hard to
make the project a success.
Enel Green Power North America Inc., TradeWind Energy's development
partner, has purchased the project from TradeWind and is now its sole
Though it was the developer of Caney River, the role of TradeWind
Energy can vary, depending on the project, Gilhousen explained.
"We want to hand off a project in a well-baked condition. But that line
as a developer can be kind of grey. We always complete the Power
Purchase Agreements and all the primary contracts. Typically, we will
initiate the turbine supply and EPC process. That is kind of where the
developer hand-over line has been for us in the past.
"But with each project, we seem to be going further and further. On our
current project, we're very likely going to manage construction for the
eventual owners of the project—and we're looking forward to
Gilhousen says TradeWind Energy is not a standard development company.
"We develop projects and take them well beyond what a lot of people
think is the developer's role, taking on turbine procurement, EPC
including the detailed engineering and long lead procurement of
equipment such as transformers and switchgear. The farther we can take
things, the more we can de-risk the project for the new owner and the
more value is created."
With Caney River now behind it, and the industry looking at the
possible expiry of the Production Tax Credit later this year,
TradeWindEnergy sees a busy balance of the year. It's kind of a Good
News/Bad News scenario, though.
The Good News is that they will be busy this year, the bad news is that
they will be very busy due to the pending PTC expiry.
"The development side of the business is staring the PTC cliff directly
in the face right now," he says. The short term nature of the PTC
creates havoc for the industry, he added.
"It does not make for good public policy. If you're going to support
something, support it and give it a good stable platform to work
from—don't create policy that is going to result in a
roller-coaster of uncertainty.
"If you're trying to promote an industry and help it grow, you have to
lay a solid future for whatever incentives are going to be out
there—and unfortunately, we've seen the exact opposite of